Nothing is risk-free, not even the mighty German government bond market

For months, it seemed like nothing could stop eurozone government bond yields from falling. In a strange way, that has turned out to be true: despite the absence of any real catalyst, the market has slammed into reverse. That has been painful, but may ultimately be good news if it makes investors less complacent.

In a little over two weeks, German 10-year yields have risen to 0.55% from a record low around 0.05%. The speed of the move has been remarkable, wiping out the decline seen in the previous 3½ months. Southern...